Past Meat (BYND) earnings for the second quarter of 2021
Packs of plant-based burger patties from Beyond Meat are available for sale.
Paul Yeung | Bloomberg via Getty Images
Beyond Meat reported an unexpectedly large loss on Thursday as higher costs and investments in its business weighed on margins.
For the second half of the year, the company was cautious, citing the Delta Covid variant.
The company’s shares lost more than 4% in expanded trading.
Here’s what the company said, relative to Wall Street expectations, based on an analyst survey by Refinitiv:
- Loss per share: 31 cents vs. 24 cents expected
- revenue: Expected $ 149.4 million versus $ 140.8 million
In the second quarter of fiscal year Beyond announced that its net loss increased from $ 10.2 million, or 16 cents per share, to $ 19.7 million, or 31 cents per share, a year ago. Analysts surveyed by Refinitiv expected a loss per share of just 24 cents.
The company said the losses accelerated due to investments it is making to support its expansion efforts, such as increasing its workforce and spending more on marketing and higher freight costs.
Net sales increased 31.8% to $ 149.4 million, beating expectations of $ 140.8 million.
In the United States, which accounts for two-thirds of Beyond’s sales, demand for groceries declined as the company faced hard comparisons with last year when consumers stored groceries in the face of lockdowns. Grocery stores still account for about three-quarters of Beyond’s US sales.
US food service sales more than tripled year over year as diners returned to the restaurants. However, the company said the number of Dunkin locations running its Beyond Sausage has decreased significantly. CEO Ethan Brown said the company is still in contact with Dunkin ‘about new products and sales of its sausage alternative to locations in the western United States
Outside the US, both grocery and foodservice sales more than doubled. The company has seen Europe and China as key elements in its plan to become a global supplier of meat alternatives and has invested in expanding production capacities in these regions. Beyond first launched its meatless meatballs in Europe during the quarter.
Looking ahead to the third quarter, Beyond expects revenue of $ 120 million to $ 140 million, which is below Wall Street’s estimates of $ 153.3 million. The company expects food service sales growth to slow as restaurants and cafeterias restocked their fridges and freezers in the second quarter.
Brown told analysts on the conference call that some restaurants are more conservative on order quantities due to the increase in the Delta variety and the lack of willing workers. He also said labor issues delayed at least one of food services’ launches, which were postponed to early next year.
The delta variant has developed into the dominant form of Covid in the USA, which has led to an increase in new cases in recent weeks, especially in areas with low vaccination rates. While many restaurant companies say they haven’t seen a significant impact on their sales so far, some places are starting to impose restrictions. New York City, for example, requires proof of vaccination for some indoor activities, such as eating indoors, which could affect restaurant sales.
“I am optimistic about what lies ahead,” Brown said in a statement. “However, given the recent spike in Covid-19 cases, which could disrupt demand patterns, we generally feel we will exercise caution for the remainder of the year.”